Patent News

Apr. 16, 2015

The Hill Blog: H.R. 9 crushes innovation, killing the American dream, by Robert N. Schmidt

This post originally appeared in The Hill blog on April 16, 2015.

H.R. 9, the ill-named “Innovation Act” will allow large, market-dominant firms to infringe with impunity, by making it much more difficult for small inventors to enforce their patents. Three years ago, the American Invents Act made it more difficult to get and keep patents. H.R. 9, purported to solve a patent troll problem, is instead the next step in crushing competition from new small firms, creating “Big Tech Patent Ogres” that can ignore smaller players and their patents. This new bill makes it almost impossible for small technology startups to enforce their patents.

Patents are particularly important for innovative small businesses, which operate on much smaller margins, and often rely much more heavily on their intellectual property for revenue than large firms. Small businesses produced 16 times more patents per employee than large patenting firms, and four times as many of the most valuable patents (R&D 100 awards) as large firms.

H.R. 9 will cloud patent titles, by allowing them to be continually assaulted, making them weaker. For small business, patents will become mostly unenforceable due to the proposed much higher risk of litigation, thus making small business patents significantly less valuable. Loss of patent value constricts new company formation, chilling new investments, and choking job formation. Purporting to attack predatory trolls, H.R. 9 does little to solve the troll problem. Instead it attacks small companies enforcing their patents to protect the interests of large infringers, allowing yet another way for these large, market-dominant firms to crush their competition. This comes at the expense of new business job creation.